Japan Trade

Japan: Weakening yen props up growth in December

January 26, 2015

In December, nominal exports valued in yen expanded 12.9% over the same month of the previous year, which represented a strong acceleration over the 4.9% increase recorded in November. The rise overshot the 11.2% expansion that market analysts had expected and represented the fastest pace of growth since December 2013. Imports in December expanded a milder 1.9% in annual terms, which contrasted the 1.6% drop tallied in November. The print came in slightly below the 2.0% increase that market analysts had expected. The strong rise in exports mostly reflected the weakening of the yen, which traded at seven-year lows in December.

As a result of the strong performance in overseas shipments, the trade deficit narrowed to JPY 661 billion (USD 5.6 billion) in December from JPY 894 billion in the previous month and JPY 1.3 trillion in December 2013. Moreover, the print marked the smallest shortfall since June 2013 and was less than the JPY 735 billion deficit expected by economists. In the full year 2014, the trade deficit was JPY 12.8 trillion, which was down from JPY 11.5 trillion in 2013 and marked the largest annual shortfall on record.

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Nominal yen-denominated exports increased 12.2% year-on-year in January, accelerating from December’s 9.3% rise and coming in above market expectations of 9.4% growth.
January’s increase was driven by solid growth in exports of machinery and electrical machinery, followed by exports of chemicals, manufactured goods and transport equipment, all of which accelerated sharply relative to December’s readings.